MattAndrejczak

Net income was $886.5 million, or 60 cents a share, compared with $771.2 million, or 53 cents, in the year-earlier period. Revenue rose 18% to $24.87 billion from $21.14 billion.

Excluding special items, the Woonsocket, R.I., company earned 65 cents a share in the latest quarter.

Analysts had forecast CVS
CVS, +2.13%
to earn 63 cents a share on revenue of $24.3 billion, according to FactSet Research.

CVS is the nation's largest provider of prescriptions, filling or managing more than 1 billion of them a year. It operates more than 6,900 drugstores, with big footprints in California, Florida and Texas. CVS bolstered its store count in California and Hawaii last fall when it acquired Longs Drug.

CVS said retail sales at stores open more than one year -- a key barometer of retailer health -- rose 6.1% from the year-earlier quarter. Pharmacy same-store sales rose 7.5%. Front-end cash- register sales rose 3%.

The company said it saw an uptick in its Maintenance Choice program, which lets customers pick up 90-day prescriptions at stores rather than by mail. CVS also slightly increased the value of new contracts for pharmacy-benefits business to $1.1 billion for 2010. It further said customers are buying more general merchandise on promotion.

Looking ahead, the drug retailer raised its forecast for full-year profit from continuing operations, excluding charges, to a range of $2.59 to $2.64 a share from its previous range of $2.55 to $2.63 a share. Wall Street was looking for a profit of $2.55 a share for the period, according to FactSet.

The company cited strong year-to-date performance and "optimism for the rest of the year" for the change to its profit outlook. In January, CVS had issued a forecast that was below analyst estimates at the time, prompting investors to sell the stock.

CVS shares slipped 2 cents Tuesday to close at $33.98, backing off an intraday high of $35.50. The stock has gained more than 18% this year, more than the 11% gain for the S&P 500 Index.

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